Administrative Monetary Penalties (Canada Marine Act) Regulations: SOR/2023-138
Canada Gazette, Part II, Volume 157, Number 14
Registration
SOR/2023-138 June 19, 2023
CANADA MARINE ACT
P.C. 2023-585 June 16, 2023
Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to section 129.03footnote a of the Canada Marine Act footnote b, makes the annexed Administrative Monetary Penalties (Canada Marine Act) Regulations.
Administrative Monetary Penalties (Canada Marine Act) Regulations
Definition
Definition of Act
1 In these Regulations, Act means the Canada Marine Act.
Designation
Provisions of the Act and its regulations
2 A provision of the Act or its regulations that is set out in column 1 of a Part of Schedule 1 is designated as a provision whose contravention may be proceeded with as a violation in accordance with the Act.
Classification
Seriousness of violation
3 A violation of a provision set out in column 1 of a Part of Schedule 1 is classified as minor, serious or very serious as set out in column 2 of that Part.
Penalties
Maximum amount — individual
4 (1) The maximum amount of a penalty payable by an individual with respect to a violation of a provision set out in column 1 of a Part of Schedule 1 is
- (a) $1,250 in the case of a minor violation;
- (b) $2,500 in the case of a serious violation; and
- (c) $5,000 in the case of a very serious violation.
Maximum amount — corporation or ship
(2) The maximum amount of a penalty payable by a corporation or ship with respect to a violation of a provision set out in column 1 of a Part of Schedule 1 is
- (a) $6,250 in the case of a minor violation;
- (b) $12,500 in the case of a serious violation; and
- (c) $25,000 in the case of a very serious violation.
Calculation — penalty
5 (1) The amount of the penalty for each violation is to be determined by the formula
- A + B + C + D – E
- where
- A
- is the baseline penalty amount as determined under section 6;
- B
- is the history of non-compliance amount, if any, as determined under section 7;
- C
- is the harm amount, if any, as determined under section 8;
- D
- is the economic gain amount, if any, as determined under section 9; and
- E
- is the mitigating factor amount, if any, as determined under subsection (2).
Determination of mitigating factor amount
(2) The mitigating factor amount referred to in element E of the formula is obtained by multiplying the percentage determined under section 10 by the sum of elements A, B, C and D.
Baseline penalty amount
6 The baseline penalty amount applicable to a violation is the amount set out in column 2 of Part 1 of Schedule 2, in the case of an individual, or Part 2 of that Schedule, in the case of a corporation or ship, that corresponds to the seriousness of the violation set out in column 1 of the applicable Part.
History of non-compliance amount
7 (1) If the violator has a history of non-compliance, the history of non-compliance amount applicable to a violation is the amount set out — for the number of incidents of non-compliance — in column 3 of Part 1 of Schedule 2, in the case of an individual, or Part 2 of that Schedule, in the case of a corporation or ship, that corresponds to the seriousness of the violation set out in column 1 of the applicable Part.
History of non-compliance
(2) A violator has a history of non-compliance if, in the five years before the violation,
- (a) a notice of violation was issued to them for a violation of the same provision or a similar provision of the Act or its regulations, and they
- (i) have paid the penalty for the violation under section 129.06 of the Act,
- (ii) are deemed, under section 129.09 of the Act, to have committed the violation, or
- (iii) were subject to a determination made under subsection 129.1(3) or 129.11(3) of the Act that they committed the violation; or
- (b) the violator was found guilty of an offence under the Act.
Harm amount
8 (1) If the violation results or may result in harm, the harm amount is the amount set out in column 4 of Part 1 of Schedule 2, in the case of an individual, or Part 2 of that Schedule, in the case of a corporation or ship, that corresponds to the seriousness of the violation set out in column 1 of the applicable Part, and that corresponds to the category of real or potential impact on the safety of persons and property and on the environment, as determined under subsection (2).
Category of impact
(2) The category of real or potential impact is
- (a) weak, if the real or potential impact of the violation is trivial;
- (b) moderate, if the real or potential impact of the violation is not trivial but there is no substantial or widespread impact on property or the environment and no injury to anyone; and
- (c) high, if the real or potential impact of the violation on property or the environment is substantial or widespread or an individual is injured.
Economic gain amount
9 If, as a result of the violation, the violator benefits from an economic gain or competitive advantage, including by obtaining revenue, profit or income or avoiding or delaying any cost, the economic gain amount is the amount set out in column 5 of Part 1 of Schedule 2, in the case of an individual, or Part 2 of that Schedule, in the case of a corporation or ship, that corresponds to the seriousness of the violation set out in column 1 of the applicable Part.
Mitigating factors amount
10 The percentage that is to be used to calculate the mitigating factor amount is the percentage set out in column 6 of Part 1 of Schedule 2, in the case of an individual, or Part 2 of that Schedule, in the case of a corporation or ship, that corresponds to the seriousness of the violation set out in column 1 of the applicable Part and is
- (a) 20%, if the violator voluntarily discloses the violation to an enforcement officer; or
- (b) 10%, if the violator cooperates with the enforcement officer or has taken voluntary measures to mitigate the harm caused or the harm that could have been caused by the violation.
Continuing violation
11 If an “X” is set out in column 3 of a Part of Schedule 1, a violation of a provision set out in column 1 constitutes a separate violation for each day on which it is continued.
Service
Methods of service
12 An enforcement officer may serve a notice of violation
- (a) in the case of an individual,
- (i) by leaving a copy of it with the individual or, if the individual cannot conveniently be found, with someone who appears to be an adult member of the same household at the last known address or usual place of residence of the individual, or
- (ii) by sending a copy of it by registered mail, courier or fax or other electronic means to the individual’s last known address or usual place of residence;
- (b) in the case of a corporation,
- (i) by sending a copy of it by registered mail, courier or fax or other electronic means to the head office or place of business of the corporation, or
- (ii) by leaving a copy of it with an officer or other individual who appears to direct or control the head office or place of business of the corporation or with the corporation’s agent or mandatary; and
- (c) in the case of a ship,
- (i) by leaving a copy of it with the owner, master or any individual who is, or appears to be, in charge of the ship, or
- (ii) by fixing a copy of it to a prominent part of the ship.
Proof of service
13 Service may be proven by
- (a) in the case of service in person, a certificate of service, in a form approved by the Minister and signed by the person who serves the notice of violation, and that indicates the name of the person receiving the notice and the means by which and day on which service was effected;
- (b) in the case of service by fax or other electronic means, a record of electronic transmission that sets out the date and time of transmission; and
- (c) in any other case, an acknowledgment of service signed by or on behalf of the person served, that specifies the date, place and means of service.
Effective date of service
14 Service is effective
- (a) in the case of a certificate of service, on the day indicated on the certificate;
- (b) in the case of service by fax or other electronic means, on the day indicated on the record of transmission; and
- (c) in the case of service by registered mail or courier, on the fourth day after the day on which a copy of the notice of violation is sent, as indicated on the receipt issued by the postal or courier service.
Payment
Payment options
15 (1) Any payment of a penalty required under these Regulations must be made within 30 days after the day on which the notice of violation is served.
Method of payment
(2) The payment must be made by means of credit card, or a certified cheque or money order made payable to the Receiver General for Canada.
Deemed date of payment
(3) The payment is deemed to have been made
- (a) on the date indicated on the receipt, if the payment is made in person;
- (b) on the date indicated on the postmark stamped on the envelope, if the amount is sent by regular mail;
- (c) on the date indicated on the receipt issued by the postal or courier service, if the payment is sent by registered mail or courier; and
- (d) on the date the transaction was processed, if the payment was made by credit card.
Coming into Force
Registration
16 These Regulations come into force on the day on which they are published in the Canada Gazette, Part II.
SCHEDULE 1
(Sections 2 and 3, subsections 4(1) and (2) and section 11)
Violations — Canada Marine Act and its Regulations
PART 1
| Item | Column 1 Provision |
Column 2 Classification |
Column 3 Separate Violation for Each Day |
|---|---|---|---|
| 1 | Subsection 58(3) | Very serious | |
| 2 | Paragraph 59(1)(a) | Very serious | |
| 3 | Paragraph 59(1)(b) | Very serious | |
| 4 | Subsection 116(2) | Very serious | |
| 5 | Paragraph 126(a) | Very serious | |
| 6 | Paragraph 126(c) | Very serious |
PART 2
| Item | Column 1 Provision |
Column 2 Classification |
Column 3 Separate Violation for Each Day |
|---|---|---|---|
| 1 | Paragraph 5(a) | Very serious | |
| 2 | Paragraph 5(b) | Very serious | X |
| 3 | Paragraph 5(c) | Very serious | X |
| 4 | Paragraph 5(d) | Serious | |
| 5 | Paragraph 5(e) | Very serious | X |
| 6 | Paragraph 5(g) | Very serious | |
| 7 | Paragraph 5(h) | Very serious | X |
| 8 | Paragraph 5(i) | Very serious | X |
| 9 | Section 6 | Very serious | |
| 10 | Section 7 | Very serious | |
| 11 | Paragraph 13(1)(b) |
|
|
| 12 | Section 14 | Very serious | |
| 13 | Paragraph 15(a) | Serious | |
| 14 | Paragraph 15(c) | Very serious | |
| 15 | Paragraph 16(b) | Minor | |
| 16 | Paragraph 17(a) | Very serious | |
| 17 | Paragraph 17(b) | Minor | |
| 18 | Paragraph 17(c) | Minor | |
| 19 | Section 18 | Minor | |
| 20 | Subsection 28(1) | Serious | |
| 21 | Subsection 32(4) | Minor |
PART 3
| Item | Column 1 Provision |
Column 2 Classification |
Column 4 Separate Violation for Each Day |
|---|---|---|---|
| 1 | Paragraph 14(a) | Very serious | |
| 2 | Paragraph 14(b) | Very serious | X |
| 3 | Paragraph 14(c) | Very serious | X |
| 4 | Paragraph 14(d) | Serious | |
| 5 | Paragraph 14(e) | Very serious | X |
| 6 | Paragraph 14(g) | Very serious | |
| 7 | Paragraph 14(h) | Very serious | X |
| 8 | Paragraph 14(i) | Very serious | X |
| 9 | Section 15 | Very serious | |
| 10 | Paragraph 23(1)(b) |
|
|
| 11 | Section 24 | Very serious | |
| 12 | Paragraph 25(a) | Serious | |
| 13 | Paragraph 25(c) | Very serious | |
| 14 | Paragraph 26(c) | Minor | |
| 15 | Paragraph 27(a) | Very serious | |
| 16 | Paragraph 27(b) | Minor | |
| 17 | Paragraph 27(c) | Minor | |
| 18 | Paragraph 28(a) | Very serious | |
| 19 | Paragraph 28(b) | Minor | |
| 20 | Subsection 36(1) | Serious | |
| 21 | Subsection 40(3) | Minor |
PART 4
| Item | Column 1 Provision |
Column 2 Classification |
Column 3 Separate Violation for Each Day |
|---|---|---|---|
| 1 | Paragraph 5(a) | Very serious | |
| 2 | Paragraph 5(b) | Very serious | X |
| 3 | Paragraph 5(c) | Very serious | X |
| 4 | Paragraph 5(d) | Serious | |
| 5 | Paragraph 5(e) | Very serious | X |
| 6 | Paragraph 5(g) | Very serious | |
| 7 | Paragraph 5(h) | Very serious | X |
| 8 | Paragraph 5(i) | Very serious | X |
| 9 | Section 6 | Very serious | |
| 10 | Section 7 | Very serious | |
| 11 | Paragraph 16(1)(b) |
|
|
| 12 | Paragraph 16(1)(c) | Minor | |
| 13 | Section 17 | Very serious | |
| 14 | Paragraph 18(a) | Serious | |
| 15 | Paragraph 18(c) | Very serious | |
| 16 | Paragraph 19(b) | Minor | |
| 17 | Paragraph 20(a) | Very serious | |
| 18 | Paragraph 20(b) | Minor | |
| 19 | Paragraph 20(c) | Minor | |
| 20 | Section 21 | Minor | |
| 21 | Subsection 31(1) | Serious |
PART 5
| Item | Column 1 Provision |
Column 2 Classification |
Column 3 Separate Violation for Each Day |
|---|---|---|---|
| 1 | Paragraph 3(a) | Very serious | |
| 2 | Paragraph 3(b) | Serious | |
| 3 | Paragraph 3(c) | Very serious | |
| 4 | Paragraph 3(e) | Very serious | |
| 5 | Paragraph 3(f) | Very serious | |
| 6 | Paragraph 4(1)(b) |
|
|
| 7 | Paragraph 4(1)(c) | Minor | |
| 8 | Section 5 | Very serious | |
| 9 | Section 6 | Very serious | |
| 10 | Paragraph 7(c) | Minor | |
| 11 | Paragraph 8(a) | Very serious | |
| 12 | Paragraph 8(b) | Minor | |
| 13 | Paragraph 8(c) | Minor | |
| 14 | Paragraph 9(a) | Very serious | |
| 15 | Paragraph 9(b) | Minor | |
| 16 | Subsection 16(1) | Serious |
SCHEDULE 2
(Section 6, subsections 7(1) and 8(1) and sections 9 and 10)
Penalty Amounts
PART 1
| Column 1 Seriousness of the Violation |
Column 2 Baseline Penalty Amount (A) |
Column 3 History of |
Column 4 Harm Amount (C) |
Column 5 Economic Gain Amount (D) |
Column 6 Mitigating Factor Percentage (E) |
|---|---|---|---|---|---|
| Very Serious | $1,000 | 1: $1,000 | Weak: $0 | $1,000 | Voluntary disclosure of violation: 20% |
| 2 or more: $2,000 | Moderate: $500 | Cooperation: 10% | |||
| High: $1,000 | Voluntary mitigation measures: 10% | ||||
| Serious | $500 | 1: $500 | Weak: $0 | $500 | Voluntary disclosure of violation: 20% |
| 2 or more: $1,000 | Moderate: $250 | Cooperation: 10% | |||
| High: $500 | Voluntary mitigation measures: 10% | ||||
| Minor | $250 | 1: $250 | Weak: $0 | $250 | Voluntary disclosure of violation: 20% |
| 2 or more: $500 | Moderate: $125 | Cooperation: 10% | |||
| High: $250 | Voluntary mitigation measures: 10% |
PART 2
| Column 1 Seriousness of the Violation | Column 2 Baseline Penalty Amount (A) | Column 3 History of Non-compliance Amount (B) based on number of incidents of non-compliance | Column 4 Harm Amount (C) | Column 5 Economic Gain Amount (D) | Column 6 Mitigating Factor Percentage (E) |
|---|---|---|---|---|---|
| Very Serious | $5,000 | 1: $5,000 | Weak: $0 | $5,000 | Voluntary disclosure of violation: 20% |
| 2 or more: $10,000 | Moderate: $2,500 | Cooperation: 10% | |||
| High: $5,000 | Voluntary mitigation measures: 10% | ||||
| Serious | $2,500 | 1: $2,500 | Weak: $0 | $2,500 | Voluntary disclosure of violation: 20% |
| 2 or more: $5,000 | Moderate: $1,250 | Cooperation: 10% | |||
| High: $2,500 | Voluntary mitigation measures: 10% | ||||
| Minor | $1,250 | 1: $1,250 | Weak: $0 | $1,250 | Voluntary disclosure of violation: 20% |
| 2 or more: $2,500 | Moderate: $625 | Cooperation: 10% | |||
| High: $1,250 | Voluntary mitigation measures: 10% |
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
Until 2022, the toolkit available to enforcement officers (EOs) exercising authorities under the Canada Marine Act (CMA) the Port Authorities Operations Regulations, the Public Ports and Public Port Facilities Regulations, the Seaway Property Regulations, or the Natural and Man-made Harbour Navigation and Use Regulations was limited. Most of the time, EOs faced with non-compliance had only two possibilities: issue a warning or recommend prosecution. Contraventions were only applicable to the St. Lawrence Seaway, with a single exception existing within the Port Authorities Operations Regulations.
In 2022, new contraventions were added to the CMA and its regulations. While the expansion of this tool will help EOs to respond to specific types of non-compliance (appropriate for “on-the-spot” enforcement and where the response needs to be slightly stronger than a warning), the lack of a middle-ground option remains an issue. More specifically, the small size of contraventions fines (maximum $500) as well as their fixed nature can make them less suited in many situations of non-compliance, e.g. committed by large corporations or repeated violators; with an economic gain perspective; or, more generally, of a more severe nature.
Prosecution is the most serious enforcement action available. For cases of regulatory non-compliance which are considered less serious, the enforcement response of prosecution does not match the relative seriousness of the non-compliance. In addition, judicial proceedings are costly and time-consuming, and are difficult to justify for these situations. As a result, in all four areas of responsibility throughout the country, EOs rely on issuing warnings to address non-compliance, which means that the CMA and its regulations are underenforced. Stakeholders responsible for enforcing the CMA have reported that warnings have been ineffective in bringing regulated entities into compliance.
Administrative Monetary Penalties (AMPs) offer a flexible tool for enforcing federal offences of a regulatory nature. AMPs allow EOs to issue monetary penalties, as an alternative to recommending prosecution, to anyone found to have violated requirements. AMPs allow the offender to choose to pay the penalty without having to appear in court. They are designed to bring regulated entities into compliance without the legal ramifications of a criminal record or imprisonment.
Background
The CMA and its regulations set requirements around the movement and operation of marine vessels within Canadian ports to ensure predictability and efficiency, and to protect the safety of people, property, and the environment.
The CMA divides the marine sector into four unique operating units: (i) Canada Port Authorities; (ii) Public Ports; (iii) the St. Lawrence Seaway; and (iv) Natural and Man-Made Harbours (Department of National Defence). The CMA empowers the Minister of Transport to designate EOs responsible for the compliance and enforcement in each operating unit. Each unit is responsible for safe and efficient operation inside land and water within its jurisdiction and can engage in, among other things, marine traffic control. The scope of regulated entities is wide and includes any person, corporation or ship within the jurisdiction of the operating unit. For example, a ship, its operator or owner, a crewmember, a fisher, or a company carrying out dredging operations inside the regulated zone are all regulated entities.
In 2017, the National Enforcement Program (NEP, formerly the Centre of Enforcement Expertise) of Transport Canada (TC) launched the Canada Marine Act Compliance Program. Charged with standardizing enforcement across each operating unit, the Canada Marine Act Compliance Program consulted with stakeholders, including the Association of Canadian Port Authorities, the St. Lawrence Seaway Management Corporation, TC (as the operator of public ports) and the Department of National Defence to understand their concerns with how the CMA and its regulations were enforced. Discussions held by the NEP uncovered a number of concerns — including EOs’ limited options to support a graduated enforcement approach.
To address these concerns, the NEP structured a two-phased approach. The first phase, occurring over 2018–2019, saw the development of an oversight manual and the creation of a comprehensive training program for EOs.
The second phase included analyzing the potential for AMPs to help EOs enforce the CMA and its regulations. The CMA provides the Governor in Council with authority to make regulations to establish AMPs for violations of the CMA or its regulations. This new AMPs regime is a direct result of that analysis.
AMPs are a tool for enforcing federal offences of a regulatory nature by means of a monetary penalty, which the offender can choose to pay without having to appear in court. Imposed through an administrative (not penal) process (i.e. violators are issued a notice of violation by an EO, which outlines the violation and the monetary penalty that the violator must pay), AMPs are designed to bring regulated entities into compliance without the legal ramifications of a criminal record or imprisonment. AMPs are a flexible enforcement tool, designed to be proportionate to the nature of the violation in question. AMPs regimes often use graduated penalty structures, which provide for increasing penalty amounts for repeat violations by the same entity.
Objective
The Administrative Monetary Penalties (Canada Marine Act) Regulations (Regulations) enable an AMPs regime under the CMA. The objective is to ensure a more predictable and transparent enforcement regime both for EOs and regulated parties.
An AMPs regime allows penalizing violations that do not warrant prosecution, but for which a warning or a contravention ticket is not a sufficient response. The implementation of a flexible, transparent, and predictable enforcement regime that includes warnings, AMPs, and prosecutions is expected to reduce non-compliance with the CMA and its regulations, thereby helping to ensure the safety and security of Canada’s marine navigation sector.
Description
The Regulations introduce AMPs for violations of the CMA and the following associated regulations: the Port Authorities Operations Regulations; the Natural and Man-made Harbour Navigation and Use Regulations; the Public Ports and Public Port Facilities Regulations; and the Seaway Property Regulations. These regulations deal with the safety, order and day-to-day work of specific ports, harbours and properties managed by
- Canada Port Authorities;
- Transport Canada;
- St. Lawrence Seaway Management Corporation; and
- the Department of National Defence.
The Regulations identify each provision of the CMA and regulations for which an AMP can be issued. The new AMPs regime includes flexible penalty amounts. In setting the amounts, TC rated each violation as minor, serious or very serious. Penalties for very serious violations can reach the maximum fines allowed by the CMA, while violations categorized as “minor” have much lower fines. The total penalty amounts vary depending on the severity level attached to the violation and aggravating or mitigating factors, up to a maximum of $5,000 for an individual and $25,000 for a corporation or a ship. In some cases, violations that continue on for more than one day may lead to separate penalties for each day. The Regulations include a schedule setting out the general procedure to calculate individual penalties.
Penalties will take into consideration any history of non-compliance by the violator, the harm the violation could cause to people, property and the environment, any potential economic gains (e.g. a ship leaving detention without authorization to resume operations), as well as any mitigating factors.
Any party issued a penalty would be able to request that the Transportation Appeals Tribunal of Canada (TATC) review the decision. Upon review, the Tribunal may decide to uphold, change, or set aside the penalty. As with any decision, the regulated parties have the opportunity to appeal a decision of the TATC or apply to the Federal Court for judicial review of the decision.
The Regulations designate as an AMP a total of 85 provisions, distributed as follows:
- CMA (6);
- Port Authorities Operations Regulations (21);
- Public Ports and Public Port Facilities Regulations (21);
- Seaway Property Regulations (21); and
- Natural and Man-made Harbour Navigation and Use Regulations (16).
Some examples of designated provisions are provided in the tables below, including whether a new penalty can be issued for each day that a violation continues. Please note that the descriptions of the violations are not included in the regulations and are provided here to facilitate understanding only.
| Provision | Description of violation | Severity of violation | Separate violation for each day? |
|---|---|---|---|
| Paragraph 59(1)(b) | Failing to follow a direction issued by a person designated by a port authority to engage in traffic control | Very serious | No |
| Subsection 116(2) | Giving an order for a ship to depart from a port in which it is currently detained | Very serious | No |
| Paragraph 126(c) | Obstructing or hindering an enforcement officer | Very serious | No |
| Provision | Description of violation | Severity of violation | Separate violation for each day? |
|---|---|---|---|
| Paragraph 5(a) | Jeopardizing the safety or health of persons in the port | Very serious | No |
| Paragraph 5(d) | Interfering with an authorized activity | Serious | No |
| Paragraph 17(b) | Failing to submit a report to the port authority detailing an emergency situation as soon as possible | Minor | No |
| Provision | Description of violation | Severity of violation | Separate violation for each day? |
|---|---|---|---|
| Paragraph 14(b) | Interfering with navigation | Very serious | Yes |
| Paragraph 14(d) | Interfering with an authorized activity in the public port or the public port facility | Serious | No |
| Subsection 40(3) | Failing to provide the port official with the description, quantity and tonnage of the cargo loaded, unloaded or transferred at each berth or anchorage within 24 hours after the loading, unloading or transferral, but before the ship’s departure | Minor | No |
| Provision | Description of violation | Severity of violation | Separate violation for each day? |
|---|---|---|---|
| Paragraph 5(c) | Obstructing or adversely effecting any part of the Seaway or Seaway property | Very serious | Yes |
| Paragraph 18(a) | Failing to post notices, lights and a barricade, or station a person, at the site of a dangerous situation | Serious | No |
| Paragraph 19(b) | Failing to submit a timely written report to the Manager describing the activity and explaining why the situation was regarded as an emergency | Minor | No |
| Provision | Description of violation | Severity of violation | Separate violation for each day? |
|---|---|---|---|
| Paragraph 3(f) | Adversely affecting sediment or water quality | Very serious | Yes |
| Paragraph 4(1)(c) | Failing to provide the harbour official with a timely report | Minor | No |
| Paragraph 8(c) | Failing to submit, as requested by a harbour official, a copy of each report made to a municipal, provincial or federal authority detailing an emergency situation | Minor | No |
Regulatory development
Consultation
TC applied a targeted communication plan to update, educate and seek feedback from key stakeholders, including vessel operators.
Consultations were primarily conducted through the Canada Marine Act Compliance Program Advisory Panel, which included representatives from (i) Halifax Port Authority, (ii) St. John’s Port Authority, (iii) Windsor Port Authority, (iv) Montreal Port Authority, (v) Vancouver Fraser Port Authority, (vi) Association of Canadian Port Authorities, (vii) Canadian Forces, and (viii) St. Lawrence Seaway Management Corporation.
In May 2018, TC distributed a survey to the Panel to gain insight into the specifics of enforcement-related activities across Canada. Survey responses showed EOs felt the Canadian Marine Act (CMA) and its regulations needed a proportionate penalty structure for effective enforcement.
In August 2018, TC hosted a workshop with the Panel to review the survey feedback. During this workshop, the panel members developed a report outlining the provisions in the CMA and the regulations proposed for designation as an Administrative Monetary Penalty (AMP). Panel members shared the report with marine transport users (e.g. vessel operators, Canadian Port Authorities, Seaway Authority) to elicit additional feedback. The Panel and TC then reconvened in April 2019. There were no substantive changes to the list of proposed AMPs or the proposed penalty structure discussed in August of 2018. Through the Panel’s activities, all the stakeholders involved in the enforcement of the CMA and its regulations were consulted on the list of the proposed AMPs and penalty structure. Stakeholders consistently expressed support for the proposal.
Since 2019, TC continued to have regular check-ins with members of the Panel on the status of the enforcement tools proposal. During this period, TC has also participated in the Association of Canadian Port Authorities subcommittee meetings on enforcement, at which requests for increased enforcement options have continually been expressed. Committee members included representatives from each of the Canadian Port Authorities, the Saint Lawrence Seaway, TC, and the Department of National Defence.
The proposal was published online on TC’s Public Involvement and Consultations website for 30 days, from May 20 to June 21, 2021. This consultation included examples of the types of violations that would be subject to AMPs, as well as the penalty ranges that have been identified. It gave an opportunity to members of the general public and affected stakeholders, such as vessel operators, to comment on the proposal. No comments on the proposal were received.
The improved enforceability resulting from an AMPs regime has been requested by stakeholders involved in enforcing the CMA and its regulations to improve safety and security in Canadian ports. These stakeholders strongly support the implementation of an AMPs regime. Discussions held during the COVID-19 pandemic indicate the current situation has only increased their desire for more enforcement tools under the CMA.
The Regulations were pre-published in Part I of the Canada Gazette for 60 days, from February 19 to April 20, 2022. Three stakeholders provided comments. After a thorough analysis of the comments received, TC concluded that no changes to the Regulations were necessary to address the comments. Key comments are discussed below.
Two of the three stakeholders commented on the terms used to categorize the violations (minor, serious and very serious). They suggested that a non-compliance categorized as “very serious” should be enforced through a criminal prosecution instead of an AMP. The categorization is intended to be understood in the context of the AMPs regime only and does not correspond with an evaluation of the severity of non-compliance within the larger gradual enforcement regime. Given that the categorization only applies after the EO has selected an AMP as the appropriate enforcement tool, no changes were made to the Regulations in response to these comments.
Two of the three stakeholders commented on what they perceived as ambiguity in the terminology used in the CMA and its regulations. They expressed concerns around how concepts such as “aggravating” or “mitigating” factors are to be interpreted. The Regulations provide the factors that may be considered by an EO when determining the appropriate level of response to non-compliance. The interpretation of these aggravating or mitigating factors, such as the level of harm, potential for economic gain, history of non-compliance, is guided by policies, procedures and training provided to EOs. These factors are further considered within the context of TC’s gradual enforcement approach and additional functional guidance on the application and interpretation of these concepts is provided to EOs by TC’s NEP upon request. Given that EOs are trained in policies and procedures that guide their consideration and interpretation of factors, no changes were made to the Regulations in response to these comments.
Two of the three stakeholders commented that TC did not substantiate the scope of the underenforcement of the CMA in the Regulatory Impact Analysis Statement published in the Canada Gazette, Part I. These stakeholders also raised questions about the degree to which the proposed AMPs would incentivize compliance going forward. One stakeholder suggested that TC could have examined the degree to which the existing ticketing regime in the St. Lawrence Seaway had an effect on compliance rates. TC does not have sufficient data to draw meaningful conclusions about the scope of underenforcement of the CMA and/or the incremental effect of the ticketing regime on compliance in the St. Lawrence Seaway. In 2022, the Contraventions Regulations were amended to expand the list of designated provisions from the CMA and its regulations. As ticket amounts are low, it was felt that they would not be sufficient to deter all non-compliance. AMPs offer more flexibility - the penalty amounts are scalable, and they increase when aggravating factors are present (e.g. for repeated violations). No changes were made to the Regulations in response to these comments. It should also be noted that the AMPs regime does not introduce new requirements on stakeholders; it merely provides a new, flexible tool for EOs to enforce existing requirements.
One of the three stakeholders commented that there was not sufficient engagement and awareness with the regulated community during the regulatory development process. Specifically, he suggested that there should have been regular engagement when the process began in 2017. In addition, they felt the industry was unaware of the online consultations on TC’s website and this was the reason for the lack of response. TC conducted regular engagements both through Canadian Marine Advisory Counsel (CMAC) and Canada Marine Act Compliance Program (CMACP) from 2017 to 2022. Although in-person engagement activities were limited due to COVID-19 restrictions, information about the online consultation was posted on TC’s website and was disseminated through members of the CMACP. Additionally, the AMPs regime was presented for feedback at CMAC subcommittees between 2020 and 2021. The lack of response during the online consultation was one of the reasons a longer comment period was selected for prepublication in CGI. After the Regulation was published in CGI, on February 22, 2022, TC discussed the AMPs initiative at the CMAC subcommittee meetings and working groups in both the spring and fall sessions of 2022. Again, no significant concerns were raised at these meetings. Given that TC conducted extensive consultations with stakeholders in different fora over a five-year period, TC believes that stakeholders were made aware of the proposal and were given ample opportunity to provide feedback. Therefore, no changes were made to the Regulations in response to the comment about limited engagement with regulated stakeholders.
It should be noted that TC used the period following the publication in the Canada Gazette to engage directly with representatives from the Canadian Marine Pilots’ Association (CMPA) who had submitted a comment about potential conflicts between the CMA and the Pilotage Act. The questions raised were addressed to the CMPA’s satisfaction during this meeting.
Modern treaty obligations and Indigenous engagement and consultation
In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, analysis was undertaken to determine whether the Regulations could give rise to modern treaty obligations. This assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect, and no modern treaty obligations were identified.
Instrument choice
All violations under the CMA and its associated regulations cannot realistically be prosecuted. The strenuous resource costs and time frames for a prosecution would not be in the public interest in the vast majority of instances of non-compliance. In the absence of an enforcement tool, such as AMPs, to address regulatory violations that would not warrant a prosecution, but for which a warning is not a sufficient response, under-enforcement of the CMA and its regulations would continue.
AMPs are an ideal enforcement instrument because they are flexible, with a range of penalty amounts, and are easily administered. This is in contrast to warnings, which have limited effect; contraventions, which are, due to their fixed fine, more suitable for “on-the-spot” enforcement of specific (less severe) non-compliances; and prosecution, which requires a resource-exhaustive investigation, cooperation with the Public Prosecution Service of Canada, and other court-related resources. An AMPs regime was determined to be the best option to improve the enforcement of the CMA.As regulations are the prescribed instrument for designating provisions of the CMA as enforceable via AMPs, developing regulations in accordance with section 129.03 of the CMA is the only option to implement an AMPs regime and provide this essential enforcement tool to EOs. No non-regulatory options were considered.
Regulatory analysis
The Regulations create an AMPs regime for violations under the CMA, the Natural and Man-made Harbour Navigation and Use Regulations, Port Authorities Operations Regulations, Public Port and Public Facilities Regulations, and Seaway Property Regulations. The AMPs regime offers EOs a new tool to provide a proportionate response to non-compliance. The Regulations are expected to result in a total cost of $21,126 (present value in 2021 Canadian dollars, discounted to the base year of 2023 at a 7% discount rate) from 2023 to 2032 to the Government of Canada and third-party enforcement companies due to the redevelopment of an existing training module for new EOs and the development and implementation of a refresher course for existing EOs.
Benefits of the Regulations include the introduction of a more flexible tool to standardize the escalation of a response, while promoting compliance and enforcement. The potential use of monetary penalties rather than prosecutions is expected to result in a more cost-effective method to enforce compliance and reduce violations.
Analytical framework
The costs and benefits for the Regulations have been assessed in accordance with the Treasury Board Secretariat (TBS) Policy on Cost-Benefit Analysis by comparing the baseline against the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the Government of Canada does not implement the Regulations. The regulatory scenario provides information on the intended outcomes that would follow implementation of the Regulations. Where possible, impacts are quantified and monetized, with only the direct costs and benefits for stakeholders being considered in the analysis.
Taxes, levies and other charges constitute transfers from one group to another and are therefore not considered to be compliance or administrative costs, whether they are intended as incentives to foster compliance and change behaviour or whether their purpose is to recover the costs of providing a service. Correspondingly, the costs to pay for AMPs, as well as the revenue to the Government of Canada generated through AMPs, are not considered costs nor benefits within the scope of the regulatory analysis since they are outside the normal course of business, occurring only in instances of non-compliance.
Unless otherwise stated, all costs are expressed in present value terms (2021 Canadian dollars, discounted to the year of 2023 at a 7% discount rate) over a 10-year analytical period (2023–2032).
Affected stakeholders
The Regulations will impact the Government of Canada (11 EOs employed by TC and four EOs employed by the Department of National Defence), third-party enforcement companies (69 EOs employed by Canada Port Authorities and 18 EOs employed by the St. Lawrence Seaway Management Corporation), vessel owners and Canadians. EOs are responsible for enforcing regulations under the CMA for vessels transiting regulated entities including 58 public ports and two harbours (employed by the Government of Canada), 17 Canada Port Authorities (employed by Canada Port Authorities) and the St. Lawrence Seaway (employed by the St. Lawrence Seaway Management Corporation). While TC will incur costs associated with the development of training courses, TC, the Department of National Defence and third-party enforcement companies will incur costs associated with EOs’ participation of the refresher course (the opportunity costs).
As previously, explained, even though vessel owners will be subject to the AMPs regime and associated fees for non-compliance, such fees are not considered costs associated with the Regulations. The Regulations are expected to provide vessel owners with increased predictability surrounding enforcement and to deter non-compliance, which, in turn, is expected to result in safety benefits for passengers and employees at Canadian ports. The implementation of an AMPs regime will also benefit vessel owners by reducing the likelihood of prosecutions and costs associated with court proceedings.
Baseline and regulatory scenarios
Under the baseline scenario, EOs do not have access to flexible enforcement tools that are proportionate and reflect violation severity. When encountering non-compliance with the CMA and associated regulations, EOs can either issue a warning or prosecute for non-compliance. In the absence of the Regulations, compliance would continue to be either over-enforced, under-enforced or not enforced at all.
Under the regulatory scenario, the Regulations are expected to help address compliance challenges faced by EOs. The Regulations provide tools to bring regulated parties into compliance through proportional responses while assessing the underlying risk and harm of violations. The Regulations also require the redevelopment of the current training course for EOs and the development and implementation of a refresher course for existing EOs on the AMPs regime.
Benefits and costs
The Regulations will provide EOs exercising authority under the CMA and its regulations with access to more flexible enforcement tools that are proportionate and can reflect the severity of each violation (minor, serious or very serious). The total net costs of the Regulations are estimated to be $21,126 in the first year of implementation (2023), of which $4,362 will be incurred by enforcement companies and $16,763 will be incurred by the Government of Canada.
Benefits
The Regulations will help to achieve the intended goals of the CMA by promoting compliance and enforcement through the introduction of an AMPs regime. The Regulations will provide EOs with the necessary tools required to provide a proportionate response to non-compliance. The ability to issue penalties for non-compliance provides EOs with a gradual and standardized approach for accountability. Due to the potential risk associated with receiving a monetary penalty, violators will be incentivized to comply with the CMA and its regulations. This is expected to result in a reduction in the number of violations when compared to the baseline scenario.footnote 1 The avoidance of prosecutions in court is expected provide stakeholders with cost savings and increased predictability surrounding enforcement. Canadians are expected to benefit from an incremental increase in safety due to reduced violations.
Costs
Costs associated with the Regulations will be incurred by the Government of Canada (TC and the Department of National Defence) and third-party enforcement companies (Canada Port Authorities and the St. Lawrence Seaway Management Corporation), in the first year of implementation (2023). The Regulations are expected to result in a total incremental cost of $21,126, of which $16,763 will be incurred by the Government of Canada and $4,362 will be incurred by third-party enforcement companies. The Government of Canada and third-party enforcement companies will monitor compliance of the CMA within existing operational funding.
Redevelopment of the existing enforcement officer training module
Newly hired EOs are required to participate in a 4.5-day introductory training module. Since the existing training module does not capture every aspect of the AMPs regime, TC will update it. It was estimated that two TC employees (EC-05footnote 2 and ED-EDS-3footnote 3) will take 15 business days to redevelop the training module. Note that newly hired EOs will not incur additional training costs as there will not be a change to the training hours. The incremental cost to TC associated with redeveloping the EO training module is estimated to be $15,450, incurred in the first year of implementation (2023).
Development of the AMPs refresher course
Existing EOs will need to participate in an information session (one hour), outlining how to determine and properly administer AMPs for non-compliance with the CMA. This refresher course targets existing EOs who will need to be familiar with the new AMPs regime, with the focus on the administration of the program. This is expected to result in minimal cost implications to TC, including a one-time cost for the development of the course. This course will be administered online. Under the baseline scenario, a refresher course on the new AMPs regime does not exist. TC estimates that one employee (ED-EDS-3) will take one business day to create the course using existing training material. Incremental costs associated with the development of this course are estimated to be $522, incurred in the first year of implementation (2023).
Participation in the AMPs refresher course
There are 87 third-party EOsfootnote 4 and 15 government EOs (PM-04)footnote 5 enforcing the CMA. It was estimated that each of the existing EOs will need to devote one hour to participate in the refresher course. This course will be administered online. Under the baseline scenario, a refresher course does not exist. This cost will take into consideration the opportunity cost of foregone work hours in order to take part in the new AMPs refresher course. Incremental costs associated with the participation of this course are estimated to be $5,155 incurred in the first year of implementation (2023). These costs will be incurred by the Government of Canada ($792) and third-party enforcement companies ($4,362).
The total costs, to be incurred in the first year of implementation (2023), are estimated to be $21,126.
Cost-benefit statement
- Number of years: 10 (2023–2032)
- Base year for costing: 2023
- Present value base year: 2021
- Discount rate: 7%
| Impacted stakeholder | Description of cost | Base year: 2023 |
Other relevant years: 2024-2031 | Final year: 2032 | Total (present value) |
Annualized value |
|---|---|---|---|---|---|---|
| Enforcement companies | Opportunity costs | $4,362 | $0 | $0 | $4,362 | $621 |
| Government | Redevelopment of AMPs module | $15,450 | $0 | $0 | $15,450 | $2,200 |
| Development of AMPs refresher course | $522 | $0 | $0 | $522 | $74 | |
| Opportunity costs | $792 | $0 | $0 | $792 | $113 | |
| All stakeholders | Total costs | $21,126 | $0 | $0 | $21,126 | $3,008 |
| Impacts | Base year: 2023 | Other relevant years: 2024-2031 | Final year: 2032 | Total (present value) |
Annualized value |
|---|---|---|---|---|---|
| Total costs | $21,126 | $0 | $0 | $21,126 | $3,008 |
| Total benefits | $0 | $0 | $0 | $0 | $0 |
| Net impact | –$21,126 | $0 | $0 | –$21,126 | –3,008 |
Small business lens
An analysis conducted under the small business lens concluded that the Regulations will not have any impacts on small businesses.
One-for-one rule
The one-for-one rule does not apply to this proposal, as the Regulations will not introduce a change in the administrative burden to business. Although a new title would be introduced, the one-for-one rule does not apply because the new title would not introduce administrative burden.
Regulatory cooperation and alignment
These Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.
AMPs regimes are common in the Canadian federal regulatory landscape, and several of them are already in place at TC. AMPs regimes are also used to foster compliance with a wide range of federal regulations in other countries, including the United States, the United Kingdom, and Australia. In the United States, AMPs are used to enforce acts and regulations in ports and in the parts of the St. Lawrence Seaway under American jurisdiction.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
When applying the gender-based analysis plus (GBA+) lens to the proposal, it was determined that these Regulations are not expected to disproportionately impact any group of persons on the basis of identity factors such as gender, race, ethnicity, sexuality, religion, and age. Moreover, during consultations with stakeholders, no concerns were raised about disproportionate impacts based on identity factors.
Rationale
The Regulations are aimed at expanding the enforcement options available to EOs. The changes are expected to result in greater and more consistent enforcement of regulatory offences, thus operating both as an incentive to violators to come back into compliance and as a deterrent for future violations. Ultimately, the goal is to increase overall compliance and improve safety for all regulated parties navigating Canada’s marine transportation sector.
Implementation
The Regulations come into force on the day they are published in the Canada Gazette, Part II. The AMPs regime is now available for use by appropriately designated and trained EOs. The AMPs are an additional tool for EOs; however, EOs still have the option of issuing written warnings, issuing a ticket under the Contraventions Regulations (where applicable), or pursuing prosecution.
Payment of penalties, which must be made by credit card, or a certified cheque or money order made payable to the Receiver General for Canada, needs to be made within 30 days after the day on which a notice of violation is served.
Anyone who is issued a monetary penalty can ask to have that decision reviewed and appealed by the TATC. The TATC will review the decision and then decide to either uphold, vary (change), or set aside the penalty.
Prior to the coming into force of the Regulations, TC made sure that its partner organizations through the Association of Canadian Port Authorities, the St. Lawrence Seaway, and the Department of National Defence were provided specific details about the implementation of the new enforcement regime as well as guidance on best practices.
All EOs under the CMA have already received training on issuing AMPs. An AMPs refresher will be developed and administered online to EOs to further foster a sense of familiarity with AMPs. This training ensures that EOs from all operating units have the necessary knowledge and tools to support a clear and consistent enforcement regime across the country. EOs are ready and able to implement the new penalty regime.
Contact
Kim Hibbeln
Director General
National Enforcement Program
Transport Canada
Place de Ville, Tower C
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Email: tc.cmacprogram-programmeclmc.tc@tc.gc.ca